On November 4, the Canadian Finance Minister delivered the 2025 Federal Budget to the House of Commons. With this being the first budget of the New Prime Minister, it has been awaited eagerly. It is to be noted that this budget has yet to be voted on.
The projected budget deficit is at $78.3 Billion, up from the $42.9 Billion the Canadian government had in 2024.
Within this deficit, it plans to spend roughly $20 Billion in net new stimulus amounts. To help support its spending, 5-year Bond issuance is projected to rocket from $63Billion to $84 Billion in the coming fiscal year (2025-2026).
Turning its eye towards the housing market crisis, “Budget 2025 announces that the government will increase the Canada Mortgage Bond (CMB) annual issuance limit from $60 Billion to $80 Billion, starting in 2026 to unlock thousands of new housing units per year. The increase will apply exclusively to multi-unit housing. The government will maintain the current pace of its purchases of CMBs, up to $30 Billion annually, to allow the private market full access to the additional issuance.”
Once again, the government alludes to the possible elimination of the GST for first time home buyers on properties up to $1Million. This matter is currently before Parliament as part and parcel of Bill C-4. Should this bill be passed, this relief measure will apply to buyers and contracts entered into after May 26, 2025 and ONLY for new homes purchased from a builder.
Regarding housing supply, $13 Billion will be poured into Build Canada Homes over the course of the next five years. According to the government, this money is earmarked to “support the construction of affordable homes” and benefit “those most likely to rent.”
Haven’t heard of Build Canada Homes? According to the Government of Canada, Build Canada Homes is the newest federal agency launched on September 14, 2025, with “a mandate to scale the supply of affordable housing.” It has 3 primary functions: to lead the planning management and construction of homes, offer low-cost financing to non-market and Indigenous housing providers, and finally to help generate demand for factory build and prefabricated construction, giving support (money) to manufacturers of these products. Its agenda catalyzes a “major investment in housing” to “build homes at a rate not seen since the Second World War.”
However, according to the Parliamentary Budget Officer, it estimates that only 290,000 homes per year would be needed to close the supply gap across the nation. With an investment of $13 Billion, it seems like we are spending a lot of money to create this small number of homes.
Regarding Housing demand in Canada, the “2026-2028 Immigration Levels Plan stabilizes permanent resident admission targets at 380,000 per year for three years” (this is a slight dip from the 395,000 Canada accepted this year), “while setting a target for new temporary arrivals at 385,000 in 2026 and 370,000 in both 2027 and 2028. Concurrently, “new temporary foreign worker arrivals have fallen by about 50% this year, and new international student arrivals are roughly 60% lower than in 2024”. In addition, new asylum claims have dropped by 30% so far in 2025.
If you need more information regarding mortgages or if you need any advice on your personal situation please contact our office at 604-556-3893 or email at alex.kotai@ymscanada.ca.
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